CAD buyers making a push
Adam commented about the USDCADs weakness (loonie strength) in an earlier post. That momentum has continued with the price moving below the 1.2400 level to a new session low at 1.23887.
Technically, looking at the hourly chart above, the 1.24704 to 1.24775 area was the big bearish "tell" today. That area had been more of a floor (see red numbered circles) with some failed breaks recently that did not go far. Today, the price moved back below the level in the Asian session, rebounded to the area, and found sellers leaning. The bias shifted from dip buying to selling against the area. Bingo. The price moved lower over the last 8-9 hourly bars.
The next target on the downside would be the swing low from March 18 at 1.23646. What is the close risk now?
Drilling to the 5 minute chart below, the price action has seen sellers leaning near the 200 bar MA (green line) on earlier corrections, and then the 100 hour MA on the most recent correction (blue line). That gave sellers the go-ahead to push lower and they have run the pair to the downside.
The 38.2-50% of the last trend move lower at 1.24107 to 1.2419 is now close risk for sellers looking for more downside momentum.
If the trend sellers are to keep in full control (and the trend intact), staying below that area would be indicative of sellers in control. Ultimately, a move above the 100 and 200 bar MAs would be needed as well. However, because of the sharp moved to the downside, they are lagging well behind. A consolidation phase will be needed to let them catch up to the price.
For now though, sellers are in control with the March 18 low the next key target and intraday retracement area, the close risk.
